House of Commons Amendments

Session 2014 - 15
Internet Publications
Other Bills before Parliament

57

(b)
appropriated to meeting expenditure to be so incurred by

the contractor.

(3)
Subsection (1) does not apply, in the case of debits falling to be

brought into account as a result of section 329 of CTA 2009 (pre-

loan relationship and abortive expenses) in respect of a loan

relationship that has not been entered into, so far as the

relationship would have been one entered into for the purpose of

borrowing money to be used or appropriated as mentioned in

subsection (2).

(4)
Subsection (1) does not apply, in the case of debits in respect of a

loan relationship to which Chapter 2 of Part 6 of CTA 2009

(relevant non-lending relationships) applies, so far as—

(a)
the payment of interest under the relationship is

expenditure incurred as mentioned in subsection (2)(a),

or

(b)
the exchange loss arising from the relationship is in

respect of a money debt on which the interest payable (if

any) is, or would be, such expenditure.

(5)
If a debit—

(a)
falls to be brought into account for the purposes of Part 5

of CTA 2009 in respect of a loan relationship of the

contractor, but

(b)
as a result of this section cannot be brought into account

in a way that results in any reduction of what would

otherwise be the contractor’s ring fence profits,


the debit is to be brought into account for those purposes as a

non-trading debit despite anything in section 297 of that Act.

(6)
References in this section to a loan relationship, in relation to the

borrowing of money, do not include a relationship to which

Chapter 2 of Part 6 of CTA 2009 (relevant non-lending

relationships) applies.

356NC
Restriction on credits to be brought into account

(1)
Credits in respect of exchange gains from the contractor’s loan

relationships may not be brought into account for the purposes

of Part 5 of CTA 2009 (loan relationships) in any way that results

in an increase of what would otherwise be the contractor’s ring

fence profits, but this is subject to subsections (2) to (4).

(2)
Subsection (1) does not apply so far as a loan relationship is in

respect of money borrowed by the contractor which has been—

(a)
used to meet expenditure incurred by the contractor in

carrying on oil contractor activities, or

(b)
appropriated to meeting expenditure to be so incurred by

the contractor.

(3)
Subsection (1) does not apply, in the case of credits falling to be

brought into account as a result of section 329 of CTA 2009 (pre-

loan relationship and abortive expenses) in respect of a loan

relationship that has not been entered into, so far as the

relationship would have been one entered into for the purpose of

58

borrowing money to be used or appropriated as mentioned in

subsection (2).

(4)
Subsection (1) does not apply, in the case of credits in respect of

a loan relationship to which Chapter 2 of Part 6 of CTA 2009

(relevant non-lending relationships) applies, so far as—

(a)
the payment of interest under the relationship is

expenditure incurred as mentioned in subsection (2)(a),

or

(b)
the exchange gain arising from the relationship is in

respect of a money debt on which the interest payable (if

any) is, or would be, such expenditure.

(5)
If a credit—

(a)
falls to be brought into account for the purposes of Part 5

of CTA 2009 in respect of a loan relationship of the

contractor, but

(b)
as a result of this section cannot be brought into account

in a way that results in any increase of what would

otherwise be the contractor’s ring fence profits,


the credit is to be brought into account for those purposes as a

non-trading credit despite anything in section 297 of that Act.

(6)
Section 356NB(6) applies for the purposes of this section.

Relief

356ND
Management expenses

No deduction under section 1219 of CTA 2009 (expenses of

management of a company’s investment business) is to be

allowed from the contractor’s ring fence profits.

356NE
Losses

Relief in respect of a loss incurred by the contractor may not be

given under section 37 (relief for trade losses against total profits)

against the contractor’s ring fence profits except so far as the loss

arises from oil contractor activities.

356NF
Group relief

(1)
On a claim for group relief made by a claimant company in

relation to a surrendering company, group relief may not be

allowed against the claimant company’s contractor’s ring fence

profits except so far as the claim relates to losses incurred by the

surrendering company that arose from oil contractor activities.

(2)
In section 105 (restriction on surrender of losses etc within

section 99(1)(d) to (g)) the references to the surrendering

company’s gross profits of the surrender period do not include

the company’s relevant contractor’s ring fence profits for that

period.

(3)
The company’s “relevant contractor’s ring fence profits” for that

period are—

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(a)
if for that period there are no qualifying charitable

donations made by the company that are allowable under

Part 6 (charitable donations relief), the company’s

contractor’s ring fence profits for that period, or

(b)
otherwise, so much of the contractor’s ring fence profits

of the company for that period as exceeds the amount of

the qualifying charitable donations made by the company

that are allowable under section 189 for that period.

(4)
In this section “claimant company” and “surrendering company”

are to be read in accordance with Part 5 (group relief) (see section

188).

356NG
Capital allowances

A capital allowance may not to any extent be given effect under

section 259 or 260 of CAA 2001 (special leasing) by deduction

from the contractor’s ring fence profits.”

5
In Schedule 4 (index of defined expressions), insert the following entries

at the appropriate places—

“associated
section

person (in
356LB”

Part 8ZA)

“contractor (in
section

Part 8ZA)
356L(2)”

“contractor’s
section

ring fence
356LD”

profits (in Part

8ZA)

“exploration
section

or
356L(4)”

exploitation

activities (in

Part 8ZA)

“lease (in Part
section

8ZA)
356LC”

60

“oil contractor
section

activities (in
356L(2)”

Part 8ZA)

“relevant asset
section

(in Part 8ZA)
356LA”

“relevant
section

offshore area
356L(5)”

(in Part 8ZA)

“relevant
section

offshore
356L(3)”

service (in

Part 8ZA)

Commencement etc

6
This Schedule is to be treated as having come into force on 1 April 2014

(“the commencement date”).

7
Section 356L of CTA 2010 has effect in relation to activities carried out on

or after the commencement date.

8    (1)
If, on the commencement date, a company was carrying on a trade that

consisted of, or included, carrying out oil contractor activities, an

accounting period ends (if it would not otherwise do so) with 31 March

2014.

      (2)
Sub-paragraph (3) applies if—

(a)
but for sub-paragraph (1), a company would have had an

accounting period that began before the commencement date

and ended on or after that date (“the split accounting period”),

and

(b)
the company’s accounting period beginning with 1 April 2014

ends when the split accounting period would have ended but for

that sub-paragraph.

      (3)
For the purposes of Chapter 4 of Part 22 of CTA 2010 (surrender of tax

refund within group)—

(a)
the company is to be treated as having the split accounting

period,

(b)
any tax refund due to the company for—

(i)
the accounting period ending with 31 March 2014, or

(ii)
the accounting period beginning with 1 April 2014,


is to be treated as if it were a tax refund due to the company for

the split accounting period, and

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(c)
if the company surrenders a tax refund that is so treated (or part

of such a refund), the references in section 964(6) of CTA 2010 to

the date on which corporation tax became due and payable are to

be treated as references to the date on which corporation tax

would have become due and payable had the company had the

split accounting period.

9    (1)
A company may be given relief under section 45 of CTA 2010 (carry

forward of trade loss against subsequent trade profits) for a loss made in

an accounting period ending before the commencement date against

profits of a ring fence trade so far as (and only so far as) the loss would

have been a loss of the ring fence trade had section 356L of that Act had

effect in relation to activities carried out before the commencement date

and Part 8ZA therefore applied.

      (2)
In sub-paragraph (1) “ring fence trade” means oil contractor activities

that constitute a separate trade (whether by virtue of section 356M of that

Act or otherwise).”
Schedule 27
Page 535, line 45, at end insert—
  “(7A)
Section 207(2A) applies to an appeal by virtue of sub-paragraph (7)(a) as
it applies to an appeal under section 207(1).”
Schedule 33
Page 559, line 35, leave out “(see sections 236J to 236L)” and insert “at the time of
the disposal and continues to meet that requirement for the remainder of the tax
year in which that time falls (see sections 236J to 236L and subsection (4A) of this
section)”
Page 560, line 1, leave out “but does meet it at the end of that year” and insert
“but—
(i)
it meets that requirement at the end of that tax year, and
(ii)
if it met the requirement at an earlier time in that tax year
(whether before or after the time of the disposal) it
continued to meet it throughout the remainder of that tax
year,”
Page 560, line 7, at end insert—
“(4A)
For the purposes of subsection (4)(b)—
(a)
unless the settlement met the all-employee benefit requirement by
virtue of section 236L (cases in which all-employee benefit
requirement treated as met) at the time of the disposal, that section
does not apply for the purposes of determining whether the
settlement continues to meet that requirement after the disposal,
and
(b)
if, at the time of the disposal, the settlement met that requirement
by virtue of section 236L and later continues to meet it otherwise
than by virtue of that section, it may not again meet the requirement
by virtue of that section.”
Page 560, line 19, at end insert—

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“(7)
Section 236NA makes provision about events which prevent a claim being

made under this section and circumstances in which a claim is revoked.”

Page 563, line 46, leave out “is treated as meeting that requirement” and insert “at

any time is treated as meeting that requirement at that time”

Page 564, line 9, leave out “day of the disposal mentioned in section 236H(1)” and

insert “time in question”

Page 566, line 10, at end insert—

“(A1)
The limited participation requirement is met if Conditions A and B are

met.”

Page 566, line 11, leave out “The limited participation requirement is met if” and

insert “Condition A is that”

Page 566, line 15, at end insert—

“(1A)
Condition B is that the participator fraction does not exceed 2/5 at any time

in the period beginning with that disposal and ending at the end of the tax

year in which it occurs.”

Page 566, line 18, after “(1)(b)” insert “and (1A)”

Page 567, line 7, at end insert—

“236NA
No section 236H relief if disqualifying event in next tax year

(1)
This section applies where—

(a)
a disposal is made in circumstances where paragraphs (a)

and (b) of section 236H(1) are satisfied, and

(b)
one or more disqualifying events occur in relation to the

disposal in the tax year following the tax year in which

the disposal occurs.

(2)
A “disqualifying event” occurs in relation to the disposal if and

when—

(a)
C ceases to meet the trading requirement,

(b)
the settlement ceases to meet the all-employee benefit

requirement,

(c)
the settlement ceases to meet the controlling interest

requirement,

(d)
the participator fraction exceeds 2/5, or

(e)
the trustees act in a way which the trusts, as required by

the all-employee benefit requirement, do not permit.

(3)
No claim for relief under section 236H may be made in respect of

the disposal on or after the day on which the disqualifying event

(or, if more than one, the first of them) occurs.

(4)
Any claim for relief under section 236H made in respect of the

disposal before that day is revoked, and the chargeable gains and

allowable losses of any person for any chargeable period are to

be calculated as if that claim had never been made.

(5)
Such adjustments must be made in relation to any person,

whether by the making of assessments or otherwise, as are

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required to give effect to subsection (4) (regardless of any

limitation on the time within which any adjustment may be

made).

(6)
Section 236H(4A) (restrictions on application of section 236L)

applies for the purposes of subsection (2)(b).

(7)
Section 236N(2) applies for the purposes of subsection (2)(d) as it

applies in relation to section 236N(1)(b) and (1A).”

Page 567, line 11, after “occasion” insert “, after the end of the tax year following

the tax year in which the acquisition occurs, when”

Page 567, leave out lines 13 to 25 and insert—

“(2)
A “disqualifying event” occurs in relation to the acquisition if and when—

(a)
C ceases to meet the trading requirement,

(b)
the settlement ceases to meet the all-employee benefit requirement,

(c)
the settlement ceases to meet the controlling interest requirement,

(d)
the participator fraction exceeds 2/5, or

(e)
the trustees act in a way which the trusts, as required by the all-

employee benefit requirement, do not permit.”

Page 567, line 26, leave out “after” and insert “before”

Page 567, line 34, leave out “(2)(b)(i)” and insert “(2)(b)”

Page 567, leave out lines 44 to 48

Page 568, line 1, leave out “(2)(b)(ii) as it applies in relation to section 236N(1)(b)”

and insert “(2)(b) as it applies in relation to section 236N(1)(b) and (1A)”

Page 568, line 36, at end insert—

“(7)
Section 236PA makes provision about events which prevent a claim being

made under this section and circumstances in which a claim is revoked.”

Page 568, line 36, at end insert—

“236PA
No section 236P relief if disqualifying event in next tax year

(1)
This section applies where—

(a)
a deemed disposal arises in circumstances where

paragraphs (a) to (c) of section 236P(1) are satisfied, and

(b)
one or more disqualifying events occur in relation to the

disposal in the tax year following the tax year in which

the deemed disposal arises.

(2)
No claim for relief under section 236P may be made in respect of

the deemed disposal on or after the day on which the

disqualifying event (or, if more than one, the first of them)

occurs.

(3)
Any claim for relief under section 236P made in respect of the

deemed disposal before that day is revoked, and the chargeable

gains and allowable losses of any person for any chargeable

period are to be calculated as if that claim had never been made.



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